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Ukraine: Ukrainian hryvnia shows signs of stabilization following large appreciation

April 9, 2015

The Ukrainian hryvnia (UAH) has begun to show signs of stabilizing in recent weeks, following the extremely high volatility that has characterized the currency over the past year. The hryvnia hit an all-time low against the greenback on 26 February, ending the day at 33.75 UAH per USD, which represented a 108.2% depreciation over the same day of the previous month. Following the drastic plunge, the hryvnia rebounded to a high of 21.50 UAH per USD on 10 March, which represented a 21.1% appreciation over the same day of the previous month. The strong rebound was driven by optimism surrounding the approval of IMF funds and stabilization measures undertaken by Ukraine’s Central Bank.

In recent days, the hryvnia has remained between 21.50 UAH per USD and 24.00 UAH per USD. This relative stability is due in part to the role the National Bank of Ukraine (NBU) has played in managing the exchange rate. In a statement released on 4 April, the NBU stated that it has undertaken purchase and sale interventions in March to help “mitigate sharp fluctuations in the demand for and supply for foreign exchange that occurred on an ad hoc basis.” Going forward, the NBU added that it is focused on sustaining stability in the foreign exchange market.

FocusEconomics Consensus Forecast panelists expect the hryvnia to trade at 25.56 UAH per USD at the end of 2015. For 2016, the panel sees the Ukrainian currency trading at 25.25 UAH per USD.

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